The IBM Center recently released Seven Drivers Transforming Government, a series of essays exploring key drivers of change in government. It is based on research and insights shared by current and former government officials. What follows is an edited excerpt from that report.

Digital transformation goes beyond advances in technology. It also involves disruption in how problems are tackled, how work is done, and how expectations are met. It has ushered in improvements in user experience, leveraging innovative approaches such as design thinking—a structured, interactive method to facilitate innovation among stakeholders. And digital technologies have significantly enhanced how agencies fulfill their missions in widely different ways. Consider virtual reality, for example: NASA has used it for data visualization, while the Veterans Affairs Department has used it to treat post-traumatic stress disorder.

This revolution will drive major changes for how government does business. As the Federal CIO Council’s State of Federal IT report indicates, digital transformation will significantly impact every federal agency and its employees.

The Evolving Landscape

The transformative opportunities build on two decades of progress that reflect advances in how government has leveraged the internet. These phases of change fall into three broad areas, and the functionality that each era ushered in:

- Digital Government 1.0: In this era of basic e-government, agencies moved paper-based information online without any significant reforms of the processes that could simplify and streamline the interactions citizens and businesses have with government. At the infrastructure level, agencies began to review legacy systems and develop initial modernization strategies.
- Digital Government 2.0: The advanced e-government stage saw agencies leverage communication technology to enable secure transactions with government. Citizens could apply for and receive benefits and permits and could make payments electronically. However, these services were still delivered in silos where agency applications focused on each user in a “citizen-centric” manner but did not scale across user experiences to improve the quality of transactions. At the same time, government also sought to develop shared services for back-office applications like HR and finance.
- Digital Government 3.0: In what characterizes much of the current state of digital government, the advent of social media and other collaborative technologies has created new pathways for citizens and businesses to communicate with governments. New digital technologies, including mobile apps and open networks that relied on cloud computing, led to opportunities to involve benefit recipients, regulated businesses, or even government contractors in government processes. Co-creation and co-production of policies and programs have become more common. Technology platforms now leverage open source and agile development to foster communities of public and private sector practitioners who build new systems based on understanding user experience at scale. Common and shared services delivered through central portals have provided a foundation for accessing multiple programs with a consistent process—enabling leaner government that promotes effectiveness and efficiency.
- Digital Government 4.0: The future of a digital reinvention in government will transform service delivery in the future. To take full advantage of the transformational changes made possible through the speed and scale of digital technologies, those served by government must help drive how agencies work with them. Citizen-driven government will adapt to the needs and expectations of citizens, businesses, nonprofits, and other partners to create interactions that are personalized, interactive, and easy to access and use. Cognitive technologies can enable systems to understand, reason, and learn over time, enabling government to interact with the public in real time and with strong security and privacy protections.

Modernizing IT and Reaping the Benefits

A recent IBM Center report, “Digital Service Teams: Challenges and Recommendations for Government,” finds that an important driver to rethinking government approaches to digital service delivery is the legacy IT problem, which stems from the fact that many countries began to digitize their operations decades ago using technologies now aging in place. GAO reported that about 75 percent of record-high spending on government IT in 2016 went to the operation and maintenance of legacy systems that are becoming obsolete. OMB has estimated that $3 billion worth of federal IT equipment will reach end-of-life status in the next three years.

Private sector experience has demonstrated that strategic investments in technology can produce long-term cost reductions and bring a significant positive return. As noted in the Technology CEO Council report, “The Government We Need,” duplicative and obsolete legacy systems can be replaced with modern technologies on more cost-efficient platforms. A 2015 report by the Information Technology and Innovation Foundation suggests that every $1 increase in new IT spending led to as much as a $3.49 reduction in overall government expenditures. Applied across the federal government, investment in new IT systems could yield billions in reduced costs while improving productivity. Building for the future requires agencies to transform legacy systems using cloud services and shared solutions that will result in substantial cost savings, allowing agencies to optimize spending and reinvest in critical mission needs, as well as leverage modern technologies such as mobile and the Internet of Things. The government’s recently released IT modernization strategy provides a roadmap for agencies in achieving these objectives.

Implementing Digital Government

Driving change in the federal government requires more than new policies or the infusion of new technology; it requires a sustained focus on implementation to achieve positive and significant results. Agencies must find ways to invest in new technologies to support secure and scalable applications. Identifying and prioritizing efforts for investment, integrating these priorities into agency and federal budget planning cycles, and applying appropriate measures to track the success of key efforts will drive solutions based on modern, cloud-enabled IT infrastructure, mobile services, and IT security. Critical to effective investment in digital modernization is understanding the existing barriers to capture savings over time from those investments and identifying means to overcome these barriers. Defining pathways to invest in emerging technologies that can help government will inform where and how private sector entities may most effectively support digital transformation in ways that improve performance and reduce costs.

For example, government leaders need to be able to procure commercial technologies and recognize the return on investment over time—that will require changes in IT contracting practices. Current procurement rules limit agencies’ ability to buy technology as a service and pay for it over a 5- to 10-year period. With private sector funding, agencies can approach IT modernization as a service they buy over time, eliminating the need to have funds for a multi-year investment in the current year’s budget. In this way, the government can work with private sector partners to acquire the technology to provide cost effective services for American taxpayers.

Digital government enables citizens and an increasingly mobile federal workforce to securely access high-quality information, data and services anywhere, anytime, on any device . As government adjusts to this new world, agencies must work together to build the infrastructure needed to support digital government and leverage the federal government’s buying power to reduce costs.

The digital government of the future will go beyond simply automating previously manual processes. Rather, citizens will help drive agencies to modernize, and agencies will work together to integrate systems and applications across platforms. As the 21st century evolves, digital government will drive efficiency, effectiveness and performance, harnessing the power of technology to meet the challenges of today while seizing the opportunities for tomorrow.